Fraud Conviction Overturned for Ex-Redondo Councilman

A federal appeals court on Wednesday overturned the mail fraud conviction of a former Redondo Beach councilman accused of profiting from his role in getting a condominium conversion approved.

The U.S. 9th Circuit Court of Appeals in San Francisco threw out six mail fraud convictions against Walter L. Mitchell Jr., who was found guilty in 1983 of improperly pushing for City Council approval to convert Redondo Beach’s largest apartment complex, Brookside Village, into condominiums.

The U.S. District Court jury found then that Mitchell, who allegedly received more than $100,000 in business contracts in exchange for his influence, had deprived “the citizens of the honest and loyal services of a public official.”

The mail fraud statute was applied to Mitchell’s case because the mails were used to notify residents of Brookside Village’s 385 units that their homes might be converted to condominiums.

But the conviction was placed on shaky ground in 1987 when the U.S. Supreme Court ruled that mail fraud convictions could not be based on an intangible public “right to good government.” The court said government officials could be convicted of mail fraud only if prosecutors proved that they used the mails to deprive the government of money or property.

In the appellate court decision handed down Wednesday, three justices agreed that the government did not prove that Mitchell, now 41, defrauded the city of Redondo Beach out of money or property.

The court let stand Mitchell’s conviction on a tax charge--that he failed to report more than $40,000 on his 1980 income tax return. The unreported income included money that Mitchell made through his support of the condominium conversion project, prosecutors said.

Mitchell was not at his Riverside County home Wednesday, and a relative who answered the phone said that the former painting contractor would not comment.

Mitchell’s lawyer, Maria Stratton, said she was “delighted” with the decision. “I still feel he should not have been prosecuted,” Stratton said, “so I feel vindicated.”

The councilman lost his seat in a 1980 recall election that centered on the Brookside Village issue. He moved to Riverside and, for a time, worked as a guard at the state prison at Chino.

In 1983, Mitchell was sentenced to 18 months in prison but was released a few months early for good behavior, Stratton said.

Mitchell is the most recent of several political figures to have their mail fraud convictions overturned because of the 1987 Supreme Court decision. Late last year, the 9th Circuit Court of Appeals threw out mail fraud convictions against former state Assemblyman Bruce E. Young (D-Norwalk) and former Carson Councilman Walter J. (Jake) Egan.

Mitchell’s conviction centered on his relationship with Orange County developer Robert A. Ferrante, whose company, Affordable Housing Development Corp., signed an option in 1979 to buy Brookside Village for $22 million. The purchase was contingent on Affordable Housing winning approval to convert the 385 units into condominiums.

At the time, Mitchell had been on the council for two years. He was also a painting contractor whose business had grown considerably because of contracts to paint other buildings owned by Ferrante----including two in Houston and others in the San Fernando Valley.

The councilman later received a contract to paint Brookside Village. According to evidence presented at his trial, Mitchell received at least $108,000 in 1980 from his dealings with Ferrante.

In 1979, Mitchell actively campaigned for the Brookside Village conversion, even drafting a letter to the rest of the City Council saying that Ferrante’s company would meet the council’s conditions of approval.

Didn’t Know of Role

Mitchell insisted at his trial that he was unaware that Ferrante was involved with the Brookside Village project.

Mitchell abstained from the Brookside Village vote after stories in The Daily Breeze questioned his connection to the developer, but the project was approved by a 3-to-1 vote on Dec. 16, 1979.

Despite his abstention from voting on the project, Mitchell was indicted in 1983 by a federal grand jury. The grand jury contended that the councilman had used his position to influence other City Council members and members of the Planning Commission.

Political opponents who launched the successful 1980 recall drive against Mitchell said they became suspicious because of his rapid rise from a part-time painter of little means to a successful contractor who wore expensive suits and drove a Mercedes-Benz convertible.

“He was just a painter when he took office,” recall proponent Archie Snow said at the time of the indictment. Snow, now a city councilman, said then that he was suspicious of Mitchell’s “sudden rise from poverty to wealth overnight.”